Running a successful business involves countless responsibilities that differ in importance and complexity. And while people always talk about finances and tax cuts of running a business, most business entrepreneurship resources only scratch the surface of having employees. And when they do, they usually focus on hiring the best of the best but skim over employees’ rights and how to ensure they have a safe and nurturing work environment.
A critical aspect of employee management required by law in most places is workers’ compensation insurance. To find the best policy rate and to inform your employees of their benefits, you need to know how compensation packages are calculated.
It’s up to you as the employer to ensure a safe work environment. That includes following state regulations in building design, number of occupants, and fire safety. Safety training is also essential, from fire and earthquake emergency protocols to preventing slips, trips, falls, and other workplace injuries. Every business is unique in its environment, resources, and occupational hazards, and your training needs to reflect that.
Most states require business owners to provide workers’ compensation coverage, though there are some exceptions and permitted exemptions. As an employer, you need to understand your industry and state-specific laws and ensure you have compliant coverage. You also need to make sure your employees understand their benefits and know how to file a workers’ comp claim.
Workers’ Comp Insurance Claims
Workplace injuries and illnesses are inevitable regardless of how safe you make the environment. When an employee injury occurs—don’t panic. First, ensure they receive immediate medical care if necessary. Then you can move forward with the workers’ compensation insurance process:
- 1. The Employee Fills Out a Claim Form– If an employee develops an occupational illness or sustains an injury that requires medical care, they should fill out a workers’ compensation claim form. The form should identify the type of injury or illness and a description of how, where, and when it took place.
- 2. You Submit Needed Paperwork– Once the employee completes the claim, send the claim and any other required documents to your insurance provider. Note that in some states, claims must be filed within a specified timeframe.
- 3. You Provide the Necessary Accommodations– After the insurance provider approves the claim, you need to make proper accommodations for the injured or ill employee. Also, you should investigate the source of the accident to ensure it doesn’t reoccur.
Before a workers’ comp insurance provider approves an employee’s claim, they complete an incident investigation. They make sure the injury falls within the policy coverage parameters and didn’t result from gross negligence or illegal activity. Failing to provide concrete evidence for the aforementioned conditions can result in a denied claim. However, if the insurance company approves the claim, the move into the second step, which is compensation calculation.
Next, the insurance company prepares a compensation package and offers it to your employee. The amount offered primarily depends on two factors: the employee’s weekly wage and the severity and permanence of the injury. Suppose the injury or illness prevents the employee from working. In that case, the insurance company substitutes a percentage of their weekly wage—determined by state laws—for a set period or until they’re able to work again. They also cover the medical bills, retraining costs, and separate compensation for permanent injuries that result in disabilities.
Workers’ Comp Settlements
If the employee agrees to the insurance company’s compensation package, they’re not entitled to further settlements, and they can’t sue your company for damages. However, if they don’t agree with the compensation, they can consult with an attorney to negotiate with the insurance provider for more compensation. If your insurance company agrees to their conditions, then the case closes.
On the other hand, if the two parties can’t come to an agreement, the situation can evolve into a settlement process, where a state-assigned judge makes the final verdict. As the employer, you need to make sure you hire an insurance company you trust would offer your workers’ fair compensation and make sure the process goes as smoothly as possible if it comes down to a settlement.
Workers’ Compensation Considerations
Hiring the right insurance company will ensure you pay a fair amount for coverage and that your employees receive appropriate compensation. Before deciding on a provider, you should also do a quick background on the companies you’re considering, ensuring they have a history of clear communication and offering fair compensation.